Capital Briefs: Senate Panel Sets Bankruptcy Reform Vote

The Senate Judiciary Committee plans to vote Thursday on bankruptcy reform legislation.

The committee had been scheduled to vote March 25 on a bill introduced by Sen. Charles E. Grassley, R-Iowa, but postponed action to give members more time to review the details. The Grassley bill would let bankruptcy judges force consumers to repay unsecured debt if, after living and other expenses, they could afford to pay 25% of unsecured debt or $15,000.

The House Judiciary Committee has tentatively scheduled a vote on its version for April 20.

The House committee's commercial and administrative law subcommittee approved legislation on a 5-to-3 vote March 25. Introduced by subcommittee Chairman George W. Gekas, the bill would use a formula to determine whether consumers could eliminate unsecured debts in Chapter 7 or repay them in Chapter 13.

Consumers generally would be barred from Chapter 7 if, after accounting for living and other expenses, they could repay over five years at least 25% of unsecured credit or $5,000.

The Clinton administration threatened before the subcommittee vote to veto the House bill; many of its objections also apply to the Senate bill.